Profits at Gunpoint

by Daphne Eviatar

The Nation magazine, June
30, 2003

Maung Maung was no stranger to the brutality
of the government of Burma (called | Myanmar by its military rulers).
A former geologist and leader of the national mineworkers' union,
Maung was forced to flee the country in 1988 when, following a
massive citizens' uprising, a new military government began to
arrest, torture and execute thousands of pro-democracy demonstrators.
But Maung was nevertheless surprised when, nine years ago, he
came across hundreds of Burmese crowded into a cluster of straw
huts along the Thai-Burma border, a makeshift village that sank
in the mud when it rained.

Why had they fled Burma's lush Tenasserim
district, a peninsula of coastline, farmland and thick forests,
to live here like cattle? In a series of interviews with Maung,
founder of the exiled Federation of Trade Unions of Burma, the
villagers described armed military men expelling indigenous fishermen
from their homes and farmers from their land' razing villages
and enslaving their inhabitants. They reported that soldiers forced
everyone from children to the elderly into labor, making them
cut through thick swaths of jungle, build military installations
and haul army equipment. All of this, Maung later learned, in
order to prepare the area for a new gas pipeline.

One woman said soldiers came to her home
as she was cooking over an open fire. When her husband attempted
to flee, they shot him and shoved her and her baby into the flames,
killing the baby and leaving her with disabling scars. Others
described seeing their neighbors executed when they refused to
leave their homes. Many who joined forced-work details collapsed
from exhaustion or disease after weeks of toiling under a scorching
sun with little food or water. Two girls said they were raped
by soldiers at knifepoint.

Many of these victims are now plaintiffs
in two landmark lawsuits against Unocal, part of a consortium
of companies behind the gas pipeline. The outcomes may well determine
whether American corporations will ever be forced to account for
the brutal human rights abuses being committed around the world
in their interests.

As has now been well documented by EarthRights
International, a human rights group co-founded by former Burmese
student activist Ka Hsaw Wa, the military began clearing the land
and enslaving locals only after the oil companies initiated negotiations
with the Burmese government to build the $1.2 billion project
in 1990. The accounts collected by Ka Hsaw Wa and Maung are corroborated
by volumes of sworn deposition testimony from villagers, filed
under seal but cited in several court opinions. According to the
testimony, plaintiffs' lawyers and further interviews conducted
by such independent human rights organizations as Human Rights
Watch, hundreds of villagers were driven from their homes and
farms, and forced to work at gunpoint to prepare the area for
the pipeline.

Led by the French oil company Total (now
TotalFinaElf), the consortium entered into a joint venture with
the Burmese government around 1995 to transport vast quantities
of natural gas from the offshore Yadana field in the Andaman Sea
through a pipeline that would extend east to Thailand. The pipeline
would have to pass through Tenasserim, a region whose ethnic groups
opposed military rule. Because its agreement with the companies
required the Burmese government to protect the pipeline from sabotage,
the government increased its military presence along that thirty-nine-mile
stretch. According to testimony from villagers, many of those
forced into service cutting down trees, digging out stumps, building
barracks and helipads-were beaten regularly by guards. Some of
these same helipads were used to ferry Unocal officials when they
came to inspect the project's progress.

To prevent workers from fleeing, the military
took extreme measures. "There was a guy who had his hands
and feet bound with seven people with rope," says Maung,
who met the man while interviewing the villagers who had fled
to the Thai border. "They were put in a pit to keep them
from running away."

It was Maung who first brought the idea
of suing the oil companies to attorney Terry Collingsworth, then
an AFL-CIO representative in Nepal and a leader of the Washington,
DC-based International Labor Rights Fund. Collingsworth, together
with Burmese activists, decided to try using an obscure 1789 law
known as the Alien Tort Claims Act, which grants non-citizens
access to US courts in cases involving violations of international
law. That act had been used before to prosecute torture by foreign
military officers, but it had yet to be successfully used against
a corporation whose officers hadn't personally perpetrated the
abuses. In 1996 Collingsworth and the Labor Rights Fund used it
to sue California-based Unocal on behalf of four Burmese villagers
for encouraging and profiting from murder, torture, rape and slavery
in Burma. About a month later, EarthRights International filed
a similar lawsuit on behalf of fourteen others, targeting Unocal,
Total and the state-run Burmese and Thai gas companies. (The plaintiffs
in both cases remain anonymous to protect them from retaliation.)
Although the court ruled that it had no jurisdiction over the
foreign companies, the cases, remarkably, went forward against
Unocal, and are now being considered together in California and
federal courts.

The claims against Unocal are straightforward.
The villagers argue that because the California company was a
business partner of the Burmese government, whose military is
notorious for using forced labor, the company is responsible for
the systematic human rights violations the military committed
in order to complete the company's pipeline. While charging an
American company with slavery is controversial, there's nothing
unusual in American courts holding a company responsible for the
acts of its business partner. And international criminal tribunals
have often held individuals responsible for "aiding and abetting"
international crimes like genocide. Either of these grounds could
allow the court to rule in the villagers' favor, forcing Unocal
to face a trial.

On June 17, after years of legal wrangling
during which the case was dismissed, reinstated and then appealed-the
US Court of Appeals for the Ninth Circuit will reconsider whether
the company can be held responsible for forced labor and murder
committed by the Burmese military in connection with the pipeline.
Its decision will have implications far beyond Unocal and the
Burmese villagers. Although the Alien Tort Claims Act, originally
enacted to prosecute piracy, lay dormant for almost two centuries,
human rights and labor activists are increasingly using it to
charge American corporations with egregious violations of international
law. The Labor Rights Fund alone has half a dozen such cases pending
in federal courts around the country, claiming human rights abuses
by Exxon Mobil in Indonesia, Coca-Cola in Colombia and Del Monte
in Guatemala, among others. The New York-based Center for Constitutional
Rights has used the law to charge Royal Dutch/ Shell and Chevron-Texaco
with complicity in murder and military attacks in connection with
their oil projects in Nigeria.

The rising tide of these cases has alarmed
American corporations. They're fighting back hard, filing briefs
in support of the defendants and lobbying Congress to repeal or
amend the Alien Tort Claims Act. Still, most courts' substantive
decisions have favored the plaintiffs, and the cases are slowly
marching ahead' with the case against Unocal taking the lead-and
thus promising to set a precedent. If the Ninth Circuit rules
that Unocal must face trial for collusion in murder, torture,
rape and slavery, it will confirm that human rights activists
have hit upon a powerful tool for holding corporations legally
accountable for profiting off of the most despicable practices
of abusive governments overseas.

The US government is working to prevent
that. In May, Attorney General John Ashcroft filed a brief with
the Ninth Circuit court denouncing the villagers' attempt to use
the alien tort law to sue Unocal and arguing that every court
that has allowed such claims for the past twenty years has been
wrong. In a sweeping argument against legal accountability for
human rights violations, the Administration argues that all suits
filed under that law should be dismissed because they interfere
with US foreign policy and undermine America's war on terrorism.
Kenneth Roth, director of Human Rights Watch, calls Ashcroft's
intervention "a craven attempt to protect human rights abusers."
So far, no court has endorsed the Justice Department's view.

Unocal has fought this case every step
of the way, refusing to acknowledge even basic facts surrounding
the pipeline's construction. The company denies, for example,
that under its contract with the state-owned Burmese gas company,
the ~ government had pledged to provide security for the pipeline.
Yet Unocal's own documents, produced for the lawsuit, state that
"the government of Myanmar is responsible for protecting
the pipeline." Unocal's representative in Burma told the
US Embassy that "the companies have hired the Burmese military
to provide security for the project." Additional documents
reveal that Unocal officials on the pipeline project held daily
meetings with army commanders to tell them where they needed roads,
military installations and security. And villagers have testified
that Unocal officials regularly visited the pipeline site.

Unocal claims that it was unaware that
the Burmese military regularly used forced labor. Yet Unocal's
own consultants warned the company, according to court documents,
that "throughout Burma the government habitually makes use
of forced labour to construct roads." Even the US State Department
reported at least as early as 1991 that the military government
routinely uses forced labor. The United Nations issued more warnings
of serious human rights abuses in 1995.

With the evidence mounting, Texaco, which
had large investments in a Burma gas field, pulled out of the
country in 1997. But Unocal retained a 28 percent interest in
the pipeline, and then-Unocal president John Imle was defiant.
At a January 1995 meeting with human rights organizations, he
had argued that locals were threatening sabotage, adding, "If
you threaten the pipeline there's gonna be more military. If forced
labor goes hand and glove with the military, yes, there will be
more forced labor. For every threat to the pipeline there will
be a reaction."

If there remained any doubt, in March
of that year Unocal's Burma representative, Joel Robinson, confirmed
that he had received information from human rights groups that
"depicted in more detail than I have seen before the increased
encroachment of [the Burmese military's] activities into the villages
of the pipeline area." Robinson concluded that Unocal's insistence
that the military had not used forced labor on the company's behalf
"may not withstand much scrutiny."

By the end of 1995, Unocal consultant
John Haseman, a former military attaché at the US Embassy
in Rangoon, added to the chorus in a report to Unocal: "Based
on my three years of service in Burma, my continuous contacts
in the region since then, and my knowledge of the situation there,
my conclusion is that egregious human rights violations have occurred,
and are occurring now, in southern Burma," he told Unocal.
"The most common are forced relocation without compensation
of families from land near/along the pipeline route; forced labor
to work on infrastructure projects supporting the pipeline...and
imprisonment and/or execution by the army of those opposing such
actions"-exactly the core charges of the plaintiffs. "Unocal,"
Haseman continues, "by seeming to have accepted [the Burmese
military's] version of events, appears at best naive and at worst
a willing partner in the situation."

Unocal nonetheless adamantly maintains
that no abuses occurred. In June 2002 the company released a statement
saying that the pipeline "was constructed and is being operated
according to high ethical standards and modern business practices,"
and that despite "the challenges" of investing in a
country "ruled by an authoritarian military government,"
it is "confident that no human rights abuses have occurred
in the construction or operation of the pipeline." Even if
some abuses did occur, says Daniel Petrocelli, the lead lawyer
defending Unocal, "no Unocal person participated in any of
the alleged wrongdoing. Unocal has no control over the Myanmar
military."

With the pipeline now completed and producing
profits for Unocal, the company insists that the project benefits
Burma. The pipeline is currently producing 700 million cubic feet
of gas per day, well above early projections of 525 million, according
to Unocal spokesman Barry Lane, who says the project is "exceeding
our investment objectives." After a large group of shareholders
asked Unocal in May to reconsider its continued involvement there,
Unocal chief executive Charles Williamson maintained that the
company would not withdraw from the project.

Lane calls the project "a good investment
for the company, and a good investment for the people of Myanmar.
Our disappointment is that there aren't a hundred such projects
in the country." Unocal says that because of its project,
infant mortality in the region is down, school attendance is up
and close to 600 people have pipeline-related jobs. The company
does not calculate how many farmers and fishermen lost their livelihoods
as a result of the project's construction.

The June 17 arguments will determine whether
Unocal's claims will ever be tested at trial. If the federal court
affirms its earlier decision, it will be a major victory not only
for the villagers, but for the hundreds of victims in other countries
waiting for their day in court. But even if they lose this round,
the Burmese villagers have a chance through a second case, filed
under state law in Los Angeles. Despite repeated maneuvers to
delay by Unocal's lawyers, that trial is now set to start in July.

To Maung, it's about much more than a
court verdict. "When I told the villagers that we could sue
Unocal, they thought I was crazy," he says. "We're trying
to say that corporations can't just come in and do what they want.
They have to answer to the law."

Unocal is still hoping for a way out.
Last August, it asked the State Department to intervene, claiming
that a trial might interfere with US foreign relations. The company
was inspired by a case pending against Exxon Mobil for alleged
human rights violations in connection with its operations in Indonesia.
There, the State Department asked the federal judge to dismiss
the lawsuit on the grounds that it would interfere with the US
war on terrorism. But that's a harder case to make with Burma.
In 1997, the United States imposed sanctions against Burma, and
the State Department's latest reports state that "the government
of Burma severely abuses the human rights of its citizens"
and has "severe and pervasive forced labor problems."
It remains to be seen whether Unocal can make a credible case
that despite more than a decade of documented evidence to that
effect, it had no idea that its business partner was doing anything
wrong and that in any event, a corporation can't be held responsible.

Daphne Eviatar, a Brooklyn-based writer
and attorney, is a contributing editor at The American Lawyer.